Australia’s housing upswing is splintering, with ANZ declaring the boom effectively finished for Sydney and Melbourne even as Perth, Brisbane and Adelaide continue to run hot.
The call comes just as the Reserve Bank (RBA) has restarted tightening and clients face higher repayments.
In research released hours after Tuesday’s rate decision, ANZ economists Madeline Dunk and Jack Chambers said “Australia’s housing market looks to be on the cusp of a modest slowdown”, noting that “leading indicators suggest momentum is fading”, The Courier Mail reported.
The downgrade follows RBA’s 25-basis-point hike, which takes the cash rate to 3.85% – the first increase since November 2023, after three cuts in 2025.
RBA Governor Michele Bullock acknowledged the bank misread the strength of the rebound after those cuts.
“In our August statement we highlighted… that excess demand was potentially a risk that we weren’t picking up,” Bullock said. “That’s turned out to be a risk that has eventuated.”
With “financial conditions easing, as the cash rate eased, private demand has responded” and “come back a bit more quickly than we’d thought”, she said the board feels “at the margin maybe conditions were just a little bit loose”.
For brokers, the key story is a clear two-speed market. ANZ highlights PropTrack data showing Sydney and Melbourne already slipping while other capitals surge.
“Melbourne and Sydney dwelling prices have fallen 0.1% since November, and Sydney’s most expensive properties have declined for three months in a row,” ANZ said, warning “it is likely that these markets remain subdued” after the latest hike.
Meanwhile, Adelaide, Brisbane, and Perth continue to outperform, helped by “low levels of listings” that “are helping to keep these markets tight”. Over the past year, Perth, Darwin, Brisbane and Adelaide have all posted double‑digit gains, versus single‑digit growth in Sydney and Melbourne.
Despite early signs of fatigue, lending volumes remain strong. Private sector credit rose 0.8% in December, while investor housing credit jumped 1.0%, the biggest monthly lift since 2007. ANZ cautions that “it will likely take time for any softness in the broader housing market to show up in the credit numbers” because of lags between prices and borrowing.
For borrowers, the latest move will add roughly $80 a month to repayments on a $500,000 loan, scaling up to about $160 on a $1 million mortgage. ANZ’s head of Australian economics Adam Boyton warns that “risks are clearly skewed to an additional hike”, while Bullock has left the door open, saying she is “not predicting there will be more rate rises” but also “not saying that if inflation does remain too high that there mightn’t be”.
For mortgage brokers, that means preparing clients for diverging city conditions, tighter serviceability tests, and the real possibility of further RBA action, even as some markets stay fiercely competitive.
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